Afterpay rollercoaster gets ready to deliver next big hit

Afterpay is mulling an entry into the small business lending market as the $25 billion buy now, pay later (BNPL) juggernaut expands its offering to consumers and businesses.

Lee Hatton, the executive running Afterpay’s banking play, told the Instersekt financial technology conference in Melbourne on Wednesday that the company’s mantra of “fairness and financial freedom for all” gave it opportunities to branch out into new segments of the market.

“On the consumer side we can see that there’s this real possibility around money, what money means,” she said. “Then on the merchant side... for small businesses access to capital or other adjacencies are such an important tool for those merchants to have. We will definitely be asking those questions in the future.”

Afterpay’s Lee Hatton speaking at the Intersekt financial technology conference in Melbourne on Wednesday. Credit: Bake Agency

A move into business lending would see Afterpay compete with small business lenders Prospa and Moula, which both launched BNPL products for businesses in 2019, while rival Zip unveiled a business trade product earlier this year for lines of credit of up to $150,000.

Ms Hatton, who joined Afterpay last year after stints at Suncorp and National Australia Bank, is working on the impending launch of the company’s Money app and said launching new products and services for businesses was next on her agenda.

“My role is second album, what does that look like?,” she said. “Think big, think global, and [we have] a blank sheet of paper effectively with this hugely engaged customer base.

Ms Hatton said while some in the market were surprised by Afterpay’s decision to partner with Westpac on consumer transaction and savings accounts, via the bank’s 10X technology platform, it made sense for the company to not develop banking products on its own.

She added that the partnership with Westpac meant Afterpay did not have to spend time on regulation and acquiring a banking licence.

“Speed to market, the opportunity being in front of us, we really had to assess all those kind of things as we went through it. We want the joy of savings to feel as good as when you’re spending and I think that’s a super hard ask.”

Afterpay’s push to diversify its products in Australia comes as it continues to aggressively expand its footprint in the United States.

“We talk about build, scale, evolve,” Ms Hatton said. “In each of our markets we’re either building...or scaling. And of course, here in Australia we’re ready to evolve.”

Ms Hatton said there was a “healthy fascination” with Afterpay’s share price in the market, which has suffered volatility and was down 45 per cent from its February high of $158.47 to $86.92.

She said the market’s acute interest in the stock was shared by Afterpay’s staff as well.

“Having a company where everybody is a shareholder, they can actually see a tangible move on the things that they do every day,” she said. “I would have to say it’s a rocket ship and a roller coaster.“\

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